“Reduce The Use” Project Work Plan

Summary

To meet the current drought mandate, Hidden Valley Lake Community Services District (HVLCSD) has enhanced our newly adopted motto, “Reduce The Use”.

From the perspective of the customer, there can be no down side. If the household is eligible, customers can immediately benefit from ultra-efficient plumbing fixtures, an installation that has no up-front costs, a lower water bill, and no loan payoff commitment when the home is sold.

In its initial phase, this project targets 500 customers. Of HVLCSD’s 2400 connections, 1400 receive both water and sewer services from the district. A realistic approach to a new project, the target represents 36% of eligible households, and 20% of the community overall. Once a household has been screened and deemed eligible for the program, an indoor plumbing package will be designed to best fit the usage pattern of that home. “Reduce The Use” (RTU) is an easy way for the individual to take part in conservation that they see and hear about in the news without having to endure a negative impact to their buying power.

Based on PG&E energy billing and HVLCSD usage data, projected DWR funding will be allocated to 488.4MG/$M of water, and 55,890,696 kWh/$M over the lifetime of the project. As a member of the Westside Sacramento Integrated Regional Water Management Plan (IRWM Plan), HVLCSD has also been careful to integrate the philosophy the IRWM Plan Goals into this project, specifically goal #10 “Provide reliable water supplies of suitable quality for multiple beneficial users”, and goal #13 “Support sustainable economic activities consistent with local and state government planning efforts within the Region.”

Description

Individuals are immediately impacted by the epic lack of water in this state. Not a day goes by that television news reports, newspaper articles, and periodical business magazines are not covering some aspect of this dire situation. Water providers across the state are asking their customers to conserve in varying degrees depending on the region.

HVLCSD has developed a plan to succeed in water conservation at the most granular level, the individual household. This program is one more step that HVLCSD will make towards its continuous commitment to responsible water and energy use, as made evident by two of our most recent conservation efforts. In 2011, our solar array fields effectively eliminated

traditional kWh usage of 30,000-40,000/month from our wastewater treatment facility. For several years, our Education Outreach program visits local schools and helps bring awareness of water conservation into the home via the children. This year, the program has been named Reduce The Use.

The size of HVLCSD represents the vast majority of water providers in the state of California. The customer buyback program, which will build upon the philosophy of our recent education outreach program named Reduce The Use (RTU), works very well for Districts of this size. By creating a marketplace where customers are invited to contribute to HVLCSD’s water savings initiatives with no upfront cost or risk, RTU creates program offers to customers that can be made by many of the small water providers across the state of California. HVLCSD has developed a replicable approach for low rate California utilities. The potential is here, in this project, to make a positive impact on the planet, it only needs to be realized.

If we receive grant funding from the California Department of Water Resources (DWR), we have arranged to hire the experts at Energy Efficiency Institute, Inc. (EEI). EEI has helped utilities from New Hampshire to Hawaii use its tariffed on-bill system to make similar programs work. They have been working with California water districts, municipalities, and water utilities since 2010 and have proven their system at the Town of Windsor with its Windsor Efficiency PAYS® program. In conjunction with on-the-ground technical expertise from Resource Performance Partners (RPP), HVLCSD is ready to take part in this joint pioneering effort with help from DWR in the context of the Water-Energy Grant Program.

In terms of buying power, the benefit area of this program is actually much larger than the Hidden Valley Lake community itself. The following figures, exhibits, and explanations will prove that the RTU program will not only provide employment opportunities for plumbing contractors within the region, but will also effectively put $107,430/year back in the pockets of RTU participants. This powerful boost to the local economy cannot be underscored strongly enough. In a recent unemployment study of California, Lake County is ranked 44th in the state at a rate of 8.8%. When this figure is compared to the ranking and rates of our county abutters, Napa and Sonoma (4/4.4%, 5/5%, resp.), the vast difference becomes quite clear. Lake county businesses and residents are faced with the challenge of strengthening the local economy when fierce competition is just over county lines. Lake County needs this program to take off so RTU can become the bellwether of better things to come.

The town of Hidden Valley Lake is located in a geographically interesting area, as is all of Lake County. Socked within the Mayacama mountain ranges, the community remains insulated, to the delight of the small tourism economy, but to the chagrin of most commuters that travel to counties that offer better employment opportunities. For those that enjoy the natural beauty

of the area, however, there is a certain dogged determination to find a way to live and prosper in the country. See Figure 1.

Because of this”bucolic insulation”, the benefit area of RTU’s economic stimulus would remain within Lake County, where it is most needed.

Figure 1.

This planned community, originally designed by the Boise-Cascade Corporation in the late 1960’s found that the two most accessible means of heating homes was either electricity, propane, or a combination of the two. Energy and emissions savings within the home as a result of less water heated for showers and faucets is significant, and will be illustrated in a later exhibit.

HVLCSD is also challenged to deliver water to its customers amidst a diverse landscape that spans across different elevations. The cost of lifting water to households can be measured in energy as well as GHG emissions. A series of wells that tap into the underflow of Putah Creek convey water to a succession of pumping stations that serve homes of different elevation tiers, or zones. See Figure 2

Figure 2

Water consumption will be observed per billing period, and compared to consumption for the same period in the previous year, as well as compared to an annualized consumption figure since 2011. Using the assumptions of average consumption over the 500 targeted customers, such as 2.6 members per household and 64 gallons per capita per day of indoor water use (which translates into average shower and faucet hot water use, as well as average toilet flushing per day), customers will realize cost savings of $107,430/year. Customer energy and emissions savings reach a total of 372,000 kWh and 103,500 kgCO2e/year. See Exhibit B (page 6)

Water reduction over the course of that same year will be 6 MG, a 3% reduction for the community over all. Less water conveyed means less use of an aging infrastructure, which translates into deferred capital expenditure for HVLCSD. Less water is required to be pumped up to varying elevations, therefore affecting District energy and emissions savings of 27,600 kWh and 7,800 kg CO2e/year.

The yearly effects of this conservation effort will span the lifetime of the fixtures, which is 20 years. Water, energy and emissions that would otherwise have been consumed over this 20 year period without the RTU program reaches a total of 120MG and 13,732,344 kWh.

A key point embedded within the design of this program, is the fact that the payback structure awards HVLCSD revenue stability. Typically, a water reduction program to a water district is counterproductive. Less water use means less revenue. In this program, however, lower water usage is offset by the payback program, where HVLCSD is paid back over time for the installation of the fixtures. A program fee covering the cost of program management and quality control, nominal interest, and a rebate that can be passed on to the customer all add up to a palatable agreement between household and District. This becomes an effective drought response , achieving significant peak water savings relatively quickly for similar low rate utilities with a high percentage of residential customers. Over the longer term, proceeds from the program become available to leverage program expansion to more homes, and more comprehensive conservation measures.

Chronology

The individual steps necessary to complete this project will be presented in chronological format, so as to correspond with Scheduling and Budgetary documentation. The timeline touches upon eight principal tasks. Recursive and on-going tasks are identified at the conclusion of this chronology.

Pursuant to the California Code of Regulations (Title 14, Chapter 3, Article 19), the proposed project is exempt from CEQA Section 15301. “Existing Facilities”, Section 15302. “Replacement of Reconstruction”.

There are no Federal, State, or Local permits required for this project.

1. Feasibility Study –Research began on historical implementations of tariff on water bill programs. A fundamental understanding of how the program works developed, and why it could serve as a benefit to Hidden Valley Lake. The Town of Windsor had implemented the PAYS efficiency program in 2010, and made available details on their specific implementation of the program. An installation of Core Measures of indoor plumbing fixtures appeared to be the most transferable aspect of their program to HVLCSD, replete with four years of documented

energy and water efficiencies. This data proved there were tangible rewards to the town, and to their customers.

HVLCSD’s customer’s water consumption data and usage patterns were compiled, which included seasonal use over the past 12 months, as well as a seasonal average over the course of 3.83 years (1/1/2011 thru 10/31/2014). This usage helped develop indoor water use data needed to forecast efficiencies. HVLCSD has also planned for a rate increase that represents a significant departure from the existing rate structure. The proposed rate increase program includes a service charge and at least three rate tiers to be applied to HVLCSD’s customer’s water consumption. Sewer use will include a volumetric charge commensurate with indoor water use in addition to the existing sewer service charge. See Exhibit A.

Exhibit A.

Experts in the field were consulted to verify assumptions, provide engineering experience, as well as to provide oversight into the feasibility design (EEI, RPP). Through the combined effort of these three entities (Town of Windsor, HVLCSD, EEI&RPP), a Pro Forma worksheet was developed to explore conservation possibilities within the community of Hidden Valley Lake. See Exhibit B

Exhibit B

Hidden Valley Lake CSD Ned Orrett, P.E., & Harlan Lachman 25 Nov 2014

Scenario: AVERAGE USAGE

A. Global Variables Value Qty Installed Replaced item/usage assumed

Interest per Annum 2.5% Toilet Package (0.8 gpf ww/ shwrhd, aerators) 2 Replace ULFs flushing at 2.1 gpf; 6 flush/toilet-day

Term (years) 12 Additional Showerheads (if > toilet quantity) 0 Replace 2.2 gpm; 8 min/shwrd-day

Residents per Household 2.6 Clothes Washer (ENERGY STAR Most Efficient 2014) 0 2 uses per resident-week

Toilet Package (each, installed): $418.20 On Demand Hot Water Pump 0 min 1.5 min/day wait

LED (per installed bulb) $20 CEC California Quality LED (60w equivalent) 2

Rebate per Toilet $50

B. Key Performance Factors (Customer)

Water Saved: 2,080 gl/ billing period Customer's Savings: $23.13 per Billing Period (will change with rates)

Hot Water Saved: 529 gl/ billing period Tariffed Surcharge: $12.13 per Billing Period (fixed throughout repayment period)

Propane (heating fuel) Saved: 5.4 gl/billing period Tariffed Surcharge ÷ Cost Savings: 52% Qualifying Thershold is 75% (to assure savings)

kWh saved by LED bulb(s): 11.8 kWh/billing period kWh Saved by Hot Water Reduction: 112 N.B.: equivalency based on GHG, not energy

Unit Water Savings): 13 gl per capita-dayTotal Energy Savings on Customer's Premises: 124 kWh/billing period (GHG basis)

Customer's Total GHG Reduction: 34.5 kg CO2e per Billing Period (water heating + lighting)

C. Key Performance Factors (HVL CSD)Water Saved: 2,080 gl/ billing periodGHG Reduction (due to less water pumped): 2.6 kg CO2 equivalent per billing period

Energy Saved: 9.2 kWh/billing period

Pro Forma Resource Effi ciency Retrofit Performance for One Single Family Dwelling having average California Usage

replace 60 w interior dimmable incandescent A-type bulbs used 3+ hr/d

The Pro Forma worksheet form calculates a customer’s water bill, and relative savings. When applying past consumption figures to the new proposed rate structure, customers will clearly experience a higher water bill. After an RTU implementation, realized savings is listed in sections B & C, “Key Performance Factors”. Exhibit B is specifically illustrating the effects of average consumption within the eligible target customer base.

2. Identify Target Customers - Given the usage patterns of the community, and success factors experienced by the Town of Windsor and EEI&RPP, a target base of 500 eligible customers was determined for this initial phase of the RTU project.

These 500 customers have both water and sewer services provided by HVLCSD. Usage analysis determined that water and sewer customers even within the lowest rate tier, would be empowered to conserve water and still be financially better off. Customers within the lowest rate tier implies the number of household members lower than the per capita average, therefore indoor water consumption (ie faucet use, showers, and toilet flushing) and energy use (hot water, household lighting) are lower. The actual cost to a household (Exhibit B, Global Variables, “toilet package”) includes plumbing and lighting hardware, installation costs, a program fee, a nominal interest rate, and a rebate that gets passed on to the customer. The payback term was designed to best serve the largest number of customers. Again, when considering average consumption of the target customer base, not just the minimum, customers are still financially better after having two toilet packages installed.

A marketable feature of this program is its transferability. Customers need not concern themselves with committing to living in the household for the duration of the program. The contract arranged between a customer and HVLCSD includes provisions for transferring the payback program to the new owner of the home and its fixtures, since it simply appears as a line item on the water bill. This feature fortifies the need to secure the most current occupancy information within the target customer base. Customers must also meet minimal financial criteria (ie customer in good standing).

3. Preferred Vendor/Contractor –Once design has been completed, and this design has been used to determine a target customer base, and these customers’ billing status is current, the next progressive step in the RTU project would be to establish a relationship with plumbing vendors and plumbing contractors. The HVLCSD deliverable for this task will be to draft a Request for Bid for both Plumbing Vendors and Plumbing Contractors. The process and procedure will be commensurate with CSD guidelines. See Figure 3.

This Request for BID is for illustration purposes, and represents only the first draft in this procedure.

4. KickOff Meeting – The next step in the project plan is to host a meeting with all parties required to make the project a success. This would include outside laborers, in-house staff, and industry experts. The purpose of the meeting is to define the scope of the project. Scope would therefore include the definition of individual responsibilities on a broad scale, finite tasks that make up the sum of the project, and scheduling of these individuals and tasks.

5. Training – Three components of training will help ensure the success of this project: Plumbing installations, Billing Procedures, and Program Definition.

1. Plumbing installations - Leverage training documentation that has had the opportunity to mature over several years and iterations of buyback programs developed by the Town of Windsor, EEI&RPP. Clear standards and guidelines will be set for plumbing

Figure 3.

contractors, who will be representing HVLCSD in this water conservation initiative. This training will encompass having the contractors familiarize themselves with the preferred products of the program to the satisfaction of EEI&RPP, and in-house project management. Scheduling expectations will also be made during this training, and will involve commitment from both customer and contractor in regards to availability. Every effort will be made to ensure a full day, for consecutive days of installations for contractors.

2. Billing Procedures – HVLCSD in-house staff will receive training on how to leverage the existing utility billing software by utilizing the ‘contract’ feature to track RTU program payments. This contract feature requires a rate table setup that will marginally involve the accounting department to define general ledger accounts. In-house billing staff will become familiar with the printed statement format, in order to easily identify RTU customers. Training will also take place for the cash collections procedure and the associated general ledger transactions.

3. Program Definition – It will be paramount to the success of the program that all individuals who potentially respond to customer inquiries have a complete and thorough understanding of the program. In-house staff will be trained on what it is to be eligible for the RTU program. This, by inference, will also help in-house staff understand who may not be eligible. It will be important to simply yet effectively explain these criteria to the customer. Mature customer contract documentation from other buyback programs will be fine-tuned to the specifications of HVLCSD’s RTU program, and in-house staff will be trained on its meaning. This will help set customer’s expectations on what HVLCSD is expecting from them in terms of commitment. It will be helpful for all in-house staff to be qualified to field questions regarding the roles of plumbing contractors and HVLCSD, the timing of when fixtures are installed, and when to expect the line item to appear on their water bill. The maturation of the Feasibility Study into the Pro Forma Worksheet, will transform again into the Customer Questionnaire. A phone interview using this questionnaire will help develop the customer install list. In-house staff will learn how to use this questionnaire. Because the formulas that illustrate savings have already been built into the Pro Forma Worksheet, a few pointed questions will quickly show both the interviewer and interviewee their status. Documentation of the aforementioned policies and procedures will also reinforce training by providing a quick reference.

6. Targeted Marketing – The marketing effort will take on a two-pronged approach. First, general awareness of the RTU program will be administered by the use of a banner. This banner will be located next to the reception area of the administration office, and will offer a high-level introduction to the program. It will also provide a link within HVLCSD’s website that provides

more detailed information. The website will also offer the customer an opportunity to choose to partake in an eligibility questionnaire. Making this selection to be contacted by HVLCSD represents the beginning of a customer call list. The second portion of the marketing approach more closely targets potential participants. A pamphlet will be added to customer bills whose usage pattern shows a financial benefit to RTU conservation measures(see Figure 4.). Customer bill are sent the first week after water meters have been read. This pamphlet will also offer the recipient the opportunity to request an eligibility questionnaire. Depending on the results of the pamphlet mailing, a second postcard mailing to non-respondent potential participants may be implemented. Again, this post card will encourage customers to sign up for the eligibility questionnaire. Marketing will be designed by in-house project management staff. Printing of banners and postcards will be facilitated by a third-party printing house. Mailing of postcards will also be facilitated by this printing house. Pamphlets will be printed and mailed in-house.

Figure 4.

7. Install list – The customer call list will be in the form of a spreadsheet that will ultimately take on the function of an install list. This list will be closely managed to ensure all possible inputs are accurately recorded (inputs generated from webportal, phone calls to HVLCSD, or return of pamphlets). The first step in creating an install list would be to call the customers on the call list. Phone interviews will take place (depending on interest) for two consecutive weeks(Figure 4.) The phone interview would be standardized to include four basic tasks. First, a review of the program function would be shared with the interviewee. Next, a short list of questions is asked. The results of these questions would frame the expectations the interviewer would set for the interviewee. If eligible, savings and scheduling would be explained to the customer. Finally, the individual conducting the phone interview would update the install list and implement the back office ‘contract’ setup for eligible customers. As previously mentioned in the Training task, in-house staff would be trained on the RTU definition, and would therefore be qualified to conduct the phone interview and add to the install list. The install list would be finalized at the end of the second week, so as to allow sufficient time for Contractors to prepare for the installations.

8. Schedule installation – The Install list will contain specific details in the timing of the installation so as to best serve contractor’s time as well as the customers. These details include installation opportunities 2-3 weeks from the interview date. This timeline has been proven to be a success factor in previous iterations of the program. Another key to the success of installations is the pre-determined and set number of timeslots available for customer signup. Maintaining a full day’s worth of installs helps keep contractors vested in the long term goals of this project. Pre-installation activities will be conducted by the Contractors. Having had an opportunity to review the finalized list of installs, the pre-install week gives Contractors time to work out details of acquiring equipment from the preferred vendor(s), and contacting residents regarding accessibility into the home. The 1-2 week install schedule is designed to be completed close to the scheduled meter reads for the residential community. Once the Contractors submit their completed install list, this will enact the ‘contract’ feature within the billing system, and HVLCSD will be able to start billing back for the installation. This completed installation list will also serve as the Contractor’s invoice to HVLCSD for services rendered. Consumption tracking will also be best served when it begins at the start of a billing period.

On-going and recursive – In order to stay abreast of the flow of the RTU project, and most importantly to make sure that RTU results are on track with the figures forecast in the Feasibility Study, there are five functions that are the key to success.

1. Field customer inquiries – These inquiries will vary greatly, and continue through every phase of this project. It is important to maintain accuracy in our response to these

inquiries. Policy and procedure documentation will help ensure consistency, as will quality control by in-house project management and EEI&RPP.

2. Field in-house staff training inquiries – If, for any reason, there is ambiguity or confusion in any aspects of training, the issue will be rectified quickly and comprehensively. All parties will be notified of updates to documentation so as to prevent isolated conversations and a disparity of understanding.

3. Quality control of house visits – From the onset, during plumbing installation training, contractors will be made aware of the plan to integrate quality control within their installations. In a subset of eligible households, house visits will be conducted to verify both customer commitment claims as well as the success of plumbing installation training.

4. Maintain timely proposal monitoring – Current utility billing software tracks both customer usage patterns and the cost of water&sewer use. By exporting each billing period’s information into an Excel spreadsheet, this data can then be compared to the same billing period of the previous year, and an average of the same billing period over four years. The results of this comparison will serve as a portion of proposal monitoring delivered to the administrative arm of the 2014 Water-Energy Grant Program. Another portion of proposal monitoring will be the tracking of the utility billing software’s ‘contract’ feature. The contract report will audit an eligible customer’s reimbursement to HVLCSD. Finally, project management will keep track of personnel services of consultants, contractors, and in-house staff to ensure that it aligns to budgeted predictions. These three data points will be compiled at the completion of each billing period, which is every other month for HVLCSD.